MORE than half of local businesses believe the local economy is stagnant or getting worse, according to a survey out today.

Although most firms questioned in the South believed the economy was improving, in the North West firms were far more gloomy.

The research, by Business Pages, also found that two out of three companies believe the Government has failed to do enough to attract business. A similar number believe that Government policies designed to help the local economy are having little or no effect.

More than three quarters of businesses questioned believed not enough was being done to encourage skills development and learning.

Almost half the respondents said they believed the Government had neglected the North West and failed to regenerate the area.

Two thirds believe more Government aid should be offered to the region.

"The survey shows an obvious gap between the fortunes of the small businesses in the South and those in the North," said John Condron, managing director of Yellow Pages.

"A lot needs to be done to get all the UK to enjoy the same feel-good factor people are experiencing in the South."

The survey also found that most firms were unaware of the Government's plans to shake up advice services with the launch of the Small Business Service.